I keep reading this too, often using the 2:1 randomization as a supporting variable. The logic is wrong.
Such delays indicate one of two things, neither of which is specific to EXEL:
1. Management gave too aggressive a timeline to satisfy Wall Street's hunger for near-term events.
2. The modeling management did when setting up the trial is flawed.
The first is clearly negative. The second is certainly not positive.
We went through this with CTIC's Xyotax and YMI's tesmilifene.
CTI flat out said on call after call the delay was positive, even showing sample KM curves. This was a lie. There is no way to tell from unblinded data what's going on. Docs told us, memorably, "Xyotax is either the best drug in the history of the disease or they aren't studying what they think they are studying." That was an easy one for us to choose.
YM's tesmilifene trial didn't necessarily miss trigger timelines, it is just that the trigger should have happened sooner if the second Phase III trial was following the subgroup from the first trial. We worked with Wachovia and together hired a biostats guy to analyze the maddeningly complex adaptive design.
The ultimate conclusion was that we could not say whether the "delay" was positive or negative. What we could say was that the trial was different -- i.e. not a repeat of the prior positive subgroup data. This increased the risk, in BSR's view, since it was no longer "merely" a repeat of a prior trial but essential a brand new trial with its own behaviors. We backed off our weighting in the Model Portfolio and added puts to hedge this risk. As many know, the trial turned out negative.
My gut tells me such things happen more often when there are no randomized Phase II data and/or when the pivotal is designed off a small subgroup analysis of a prior randomized trial. The former is closest to what is going on with EXEL.
Unless otherwise indicated, this is the personal viewpoint of David
Miller and not necessarily that of Biotech Stock Research, LLC.
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